"We'll offer less RALs for less dollars for greater fees,"  Trager said in a Webcast. "We are comfortable we can underwrite to accomplish that."

That would reverse a trend over the last few years for loans to get less expensive. Last season, Republic RALs averaged about $3,400 with a typical cost of $58 for that size loan. The company did a good job in reducing the uncolletible amounts from 1 percent of the 2009 voume to under half a percent this year, Trager said. He noted the bank hires about 450 seaonal worker for the tax season business.

Banks used the debt indicator, which showed if a taxpayer had any federal obligations that would be applied against refunds, to reduce underwriting risk. H&R Block has said it expects the IRS decision will cut 5 cents per share from its earnings fo the current fiscal year.

Trager said the underwriting is already complex with Republic using about 58 criteria to evalute loan applications.